ISO/TS 10674:2011, Rating services – Assessment of creditworthiness of non-listed entities, provides common terms, definitions and basic process requirements for the assessment of creditworthiness (“Is the company worthy of having credit extended to it?”).

Extending credit to companies is a common component of business today. However, for small and medium-sized enterprises (SMEs) in particular, the decision to extend credit can involve numerous financial concerns. These concerns need to be answered beforehand to avoid a host of problems afterward – which begs the question:  “Is credit assessment reliable?”

In view of the increasing number of credit assessment service organizations, each with its individual assessment system, there is now a clear need for a common evaluation and communication tool – which is answered by the new ISO technical specification.

Dr. Olivier Everling, Chair of the project committee that developed ISO/TS 10674:2011, explains, “In the aftermath of the financial crisis, rating agencies and credit bureaus needed to simplify and provide broader market access to rating criteria, underlying models and analytical tools, to better organize information about their criteria, models and policies, and to offer access to additional analytical tools.

“ISO/TS 10674:2011 is a bi-product of the financial crisis intended to promote transparency and enable the market to best judge the performance of the assessments. It will be an invaluable tool for promoting international trade by making it possible to obtain more reliable credit assessments of even the smaller partners in global markets.”

ISO/TS 10674:2011, Rating services – Assessment of creditworthiness of non-listed entities, was prepared by ISO/PC 235, Rating services. It costs 66 Swiss francs and is available from ISO national member institutes (see the complete list with contact details) and from ISO Central Secretariat through the ISO Store or by contacting the Marketing & Communication department (see right-hand column).